Front Matter

Front Matter

Editor(s):
Mario Bléjer, and A. Cheasty
Published Date:
September 1991
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    © 1993 International Monetary Fund

    Library of Congress Cataloging-in-Publication Data

    How to measure the fiscal deficit : analytical and methodological issues / edited by Mario I. Blejer and Adrienne Cheasty.

    • p. cm.

    • Includes bibliographical references.

    • ISBN 1-55775-192-7 : $22.50

    1. Fiscal policy—Developing countries. 2. Budget deficits—Developing countries. I. Blejer, Mario I. II. Cheasty, A.

    HJI1620.H69 1993

    339.5’09172’4—dc20

    92-10723

    CIP

    Both this book’s cover and its interior were designed by the IMF Graphics Section.

    The following symbols have been used throughout this book:

    • ... to indicate that data are not available;

    • —to indicate that the figure is zero or less than half the final digit shown, or that the item does not exist;

    • —between years or months (e.g., 1991—92 or January—June) to indicate the years or months covered, including the beginning and ending years or months;

    • / between years (e.g., 1991/92) to indicate a crop or fiscal (financial) year.

    “Billion” means a thousand million.

    Minor discrepancies between constituent figures and totals are due to rounding.

    The term “country,” as used in this paper, does not in all cases refer to a territorial entity that is a state as understood by international law and practice; the term also covers some territorial entities that are not states, but for which statistical data are maintained and provided internationally on a separate and independent basis.

    Price: $22.50

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    Contents

    Part I. Overview

    Part II. The Adequacy of Summary Measures of the Fiscal Deficit

    Part III. Conventional and Adjusted Fiscal Deficits

    Part IV. Coverage of the Public Sector

    Part V. The Public Sector’s Intertemporal Budget Constraint

    Foreword

    As one of its primary functions, the IMF assesses the impact of each member government’s macroeconomic policies on the member’s own economy as well as the spillover effects of those policies on other members. The IMF is also called upon to provide policy recommendations conducive to sustained economic growth, price stability, and external equilibrium. In addition to monetary and exchange rate policies, fiscal policy is at the core of the IMF’s work. The IMF’s Fiscal Affairs Department provides extensive analytical and technical assistance to IMF members. As this volume shows, the Fiscal Affairs Department also conducts a research program that both enriches and is enriched by the work with member governments and that makes an original contribution in the area of economic policy analysis,

    I believe that the studies in this volume enhance our understanding of the complex ways in which a country’s fiscal policy can influence economic developments in the present and future. The papers collected here make it clear that there does not exist any single, unique way of assessing the impact of fiscal policy on an economy. At the same time, the papers provide analytical insights and valuable suggestions about concepts and methodologies that may be useful in different circumstances, in different countries, and for different purposes. Thus, the studies included in this volume will be particularly useful for those engaged in analyzing and formulating policy choices for political leaders,

    One of the major tasks of political leaders in any country is to develop a public consensus on fiscal policy. As seen in many industrial and developing countries, failure to do so usually leads to excessive fiscal deficits and other fiscal problems. Developing a public consensus is not easy, particularly given the distributional struggles inherent in decisions on fiscal expenditures and revenue. But that task is made even more difficult in the absence of a straightforward fiscal concept that can serve as a generally understood and accepted overall guide to fiscal policy. More refined analytical concepts enable the fiscal expert to provide better advice to political leaders but, at the same time, make the political leaders’ job of public persuasion more difficult. Addressing this dilemma more explicitly is another research task that lies ahead, but this volume provides an excellent starting point.

    Richard D. Erb

    Deputy Managing Director

    International Monetary Fund

    Acknowledgments

    The editors wish to thank the contributing authors for consenting to inclusion of their papers in this volume, as well as for cooperating actively in preparing the papers for publication. Eight of the 16 papers included have previously appeared in various IMF publications; in addition, Chapter 13 appeared, in an earlier version, in a recent issue of the Journal of Economic Literature. The views expressed in all of the papers are those of their respective authors and should not be interpreted as those of the IMF.

    The editors express their gratitude to Miguel A. Kiguel and Professor Efraim Sadka for commenting on the manuscripts in the initial stage of their preparation for publication. The editors also wish to thank James McEuen, Margaret Karsten, and Elisa Diehl for valuable editorial help, and Alicia Etechebarne-Bourdin for assistance in electronic manuscript preparation; all are with the IMF’s External Relations Department, Both the reviewers’ substantive comments and the editorial suggestions led to a significant improvement in the organization and presentation of the chapters in this volume.

    Preparing a volume like this one for publication is a demanding and time-consuming task, sometimes requiring efforts above and beyond the call of duty. The editors are particularly indebted to Ahwerah Vichailak and Luzmaria Monasi, who provided indispensable secretarial assistance.

    Last, but not least, the editors wish to express their gratitude to the Director and the many staff members of the IMF’s Fiscal Affairs Department who provided guidance, encouragement, and support for this project.

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